Ratings agency Moody’s has assigned an A1 issuer rating to Radius Housing, deemed as “outlook stable”.
Moody’s said the rating reflected Radius’s strong balance sheet with very low debt, strong liquidity, and strategic focus on low-risk social housing – accounting for 90% of turnover in fiscal 2019.
The group operates in Northern Ireland and has some 13,000 homes; with 33,000 customers. It was formed in 2017 with the merger of Fold and Helm Housing.
However, Moody’s Radius displays a weaker profitability relative to English peers; though its credit strength is underpinned by its debt metrics, which appear “very strong” relative to UK-rated peers.
Radius’s is also said to maintain its strategic focus on social housing activities, with plans to diversify over the next few years – with Moody’s viewing the group’s market sales as “lower risk” than those of peers due to different strategic drivers and more supportive demand dynamics in Northern Ireland.
Moody’s also identify the group’s credit strength as benefiting from the “strong institutional framework” governing housing associations in NI, helped by a realistic annual growth target by the Northern Ireland government.
Moody’s said it recognises the Radius’s ongoing strengthening of financial reporting and the recent adoption of a treasury policy.
“The final A1 rating reflects the uplift provided by Moody’s assessment of a strong likelihood of support from the UK government (Aa2, stable) in the unlikely event of Radius experiencing acute liquidity stress,” the report concluded.